TiVo’s Steve Wymer lays out his company’s current and future hardware plans

In the face of cord-cutters, TiVo wants to offer the best of both worlds.

Wednesday night, a report was released saying that TiVo would either be exiting the hardware business or laying off people (or both), leading to speculation about the future of the venerable DVR maker. TiVo denied that this was the case, and we had a chance to speak with TiVo Vice President of Corporate Communications Steve Wymer about the report. His responses to our questions seemed to point to the possible layoffs as being less a dramatic shift in strategy than a continuation of the path that TiVo has already been on. We began, though, with a pretty direct question.

Ars: Is TiVo exiting the hardware business?

Wymer: Emphatically, no.

Wymer wouldn’t confirm or deny that there were any layoffs, but he pointed out that staff had been "reassigned"—presumably let go—as necessary to best suit Tivo’s needs.

Next, he expanded on the response that TiVo gave to Wired late Wednesday night in an update:

One key thing that was left out of that statement is that TiVo has always worked with third-party designers for hardware and will continue to do so. ODMs are a big part of our strategy, but that doesn’t mean that there aren’t team members here that aren’t involved in the design and decision making for the hardware, and that hasn’t changed.

At CES this year, TiVo didn’t have any direct-to-consumer announcements and was instead focused on the NDVR product, which would likely be tied to and distributed by cable companies. In our earlier reporting, we speculated that TiVo might be pursuing a strategy in which it becomes an ODM to the cable companies, providing them with products through which they can distribute their content. This would be similar to the approach of Cisco and Motorola Solutions with the traditional cable box. We asked Wymer if this was a shift in strategy that TiVo was considering. He said:

It’s premature to say whether a device like the NDVR wouldn’t see a direct-to-consumer push, and it should be noted that we do already work in partnership with ODMs to provide the TiVo experience on co-branded products. Rogers, in Canada, distributes a co-branded TiVo product that is designed and manufactured by Pace, a set-top box company.

These components that are being described as future strategies for TiVo are current strategies for TiVo. We work with cable companies to provide users with the best TiVo experience, either through hardware sold direct-to-consumers, or hardware distributed by the cable companies.

Now, there is a big opportunity in a cloud-based solution that still involves TiVo hardware but that doesn’t involve the large, multi-tuner TiVo hardware everyone’s familiar with. It’s no less a TiVo experience, but contained in more modest hardware, with the brunt of the work happening in the cloud.

Looking beyond the current hardware and even the NDVR, we asked whether we should expect more of TiVo’s strategy to focus on cloud-based products. His response:

We'll certainly look to meet demand in this growing area, but that emphasis should not be construed as any abandonment of our excellent hardware solutions—current and future.

The television landscape has changed a lot since TiVo was first introduced in 1999. Major innovations that have occurred within the industry over the past 15 years include the proliferation of streaming media from services like Hulu and Netflix. Among the major disappointments, we can count CableCard, the authentication model that TiVo relies on to operate on most cable networks. The typical user experience is to purchase TiVo hardware, contact your cable operator to obtain a CableCard, and then spend innumerable hours struggling to actually obtain the card (and then get it provisioned and activated).

Cable companies aren’t the only ones hamstringing the CableCard experience; legislators have seen fit to try to bind the FCC’s hands on making CableCard, or its replacement, a useful product for consumers. Given the challenges involved in relying on CableCard for its service, we asked Wymer whether the move to cloud-based solutions was related to a move away from CableCard. He said:

TiVo has for many years been moving functionality from the box to the cloud. The impetus for TiVo to move more functionality into the cloud has nothing to do with CableCard. In terms of hardware, we have shifted our approach for certain functions from using in-house capabilities to working with outside resources that will still enable innovation but allow scale as projects actually require.

Cloud-based services still need hardware to access them, and the only way for retail devices to access cable content nationally is by using CableCard to unlock encrypted cable signals. TiVo has been advocating for a cardless successor to CableCard which would be a more modern form of security that should be easier for consumers to use, but until a successor standard is available nationwide, CableCard remains the only way for consumers to have a retail alternative to the cable set-top box leased by your cable provider.

Streaming solutions have caught on with the cable providers themselves, and they may be the most pressing threat for TiVo’s service. With more and more providers releasing mobile and big-screen applications that give users the ability to watch their shows from almost any screen, the case for either a traditional or cloud-based DVR becomes ever weaker. We concluded the interview by asking about TiVo’s position on cloud services. Wymer said:

So much of the TiVo experience is cloud based now. Aspects of the service already delivered via the cloud stand as a complementary aspect of our current hardware product. Exclusive cloud offerings are a possibility, but not indicative of an exclusive strategy.

We love streaming apps! That's why the Netflix app on TiVo Roamios are "best of class" and the very combination of the most popular streaming services with linear live and recorded TV is a key value proposition of our product. Roamio brings all those and more together. Consumers are demanding access to anything they want, anywhere. We deliver that better than any partial alternative or singular application.

Further Reading

TiVo doesn’t seem to have any doubts about its future in hardware, nor in the cloud. The explosion of cloud services has disrupted businesses both young and old, and one of the most interesting stories to come out of that upheaval has been how companies evolve as users spend less time in front of their TVs and PCs and more time on their phones and tablets. At TiVo, even as these “reassignments” take effect, the plan seems to be to attempt to unify the DVR and cloud experiences.